Universal health care dead this year

June 26, 2007|By Christina Gostomski and John L. Micek Of The Morning Call

Pennsylvanians can kiss goodbye any hope of across-the-board property tax relief or universal health care coverage -- at least for this year.

With Saturday's midnight deadline for a state budget looming, Gov. Ed Rendell on Monday dropped demands for several controversial plans, including leasing the Turnpike, but pressured lawmakers to provide a guaranteed income source for the Lehigh and Northampton Transportation Authority and other mass transit agencies.

"I still like my way of doing it," Rendell said. But, he added, "It's not my way or the highway."

Rendell had proposed raising the sales tax to 7 percent and using the estimated $1.4 billion in proceeds to lower property taxes and balance the budget. But thanks to a $502 million surplus this year, the state no longer needs the extra tax money to make ends meet in the next fiscal year, Rendell said.

"It's unnecessary due to the terrific Pennsylvania economy," Rendell said. He vowed to resume his pursuit of using a higher sales tax to reduce property taxes, saying he remains "committed to further cuts in property taxes."

Rendell said he was also putting on hold his Prescription for Pennsylvania, which calls for universal health care coverage for adults. But he said he still expects lawmakers to move other parts of his health care plan, including a state ban on smoking, and efforts to reduce hospital-acquired infections and expand the duties of nurse practitioners.

Other budget deal breakers, according to Rendell: his energy plan and funding for mass transit, education, work force training and the Jonas Salk Legacy Fund, a biotechnology research initiative.

Although Rendell said he has made his priorities clear, some Republicans have complained Rendell hasn't been specific. "To come at the last minute and say, "Here's my priority' -- it's a moving target," House Republican spokesman Steve Miskin said.

In the Senate, Rendell's energy initiatives may still face a battle, said Erik Arneson, spokesman and policy director for Senate Majority Leader Dominic Pileggi, R-Delaware. He said the chamber might need more time to review the issue.

"We believe that the top priority, by far, is to complete the budget on time for the first time in five years," he said, adding that of the non-budgetary priorities, Senate Republicans "would rank transportation funding and transit funding at the top of the list."

The state House was set to vote Monday on a transportation funding plan sponsored by Majority Whip Keith McCall, D-Carbon, that would raise about $700 million -- $450 million for highways and bridges, $250 million for mass transit -- by placing tolls on portions of Interstate 80 and borrowing against future Turnpike toll revenues.

McCall's plan would also require municipal and county governments to increase the amount they contribute toward mass transit costs from an average 13 percent to 20 percent. Local governments could fund that increased share through a menu of local tax increases, including a boosted hotel tax, a $2-a-day tax on rental cars, as well as a locally levied earned income tax.

The local options are not mandatory. But local governments still would have to increase their funding shares to draw down additional state money.

McCall's plan also creates a Public Transportation Trust Fund that would pay for the mass transit bailout by combining the $250 million in new spending with existing revenue sources for a total of $903 million in 2007-08. The fund would be used for operating programs, capital improvements and transit programs, said Johnna A. Pro, a spokeswoman for the House Appropriations Committee.

Funding for LANTA, the Lehigh Valley's mass transit agency, would increase from $6.7 million in 2006-07 to $9.6 million starting Sunday. The local share for the agency would increase from $559,800 to $1.9 million at the full 20 percent local match. The legislation allows counties to increase their local share in 5 percent increments, Pro said.

On Monday, Rendell pronounced the Democrats' plan "inadequate," because it didn't deliver the $1.7 billion he wants to fund highways and mass transit. However, the Democratic governor said he could accept a funding package that initially delivers $1 billion in funding.

"I will not sign [a funding package] that does not solve our problems for the next few decades," he said. "It has to be adequate If it's $1 billion, I will sign it."

Rendell's budget czar, Michael Masch, said it's possible to produce that much money up front by rejiggering the way the Turnpike Commission finances its bonds.

The commission now relies on a fairly conservative borrowing method. The administration believes the agency could borrow more without hurting its financial standing.

"They have more headroom to borrow at acceptable [interest] rates to meet the need," he said.